Tor

Tor is an encrypted anonymising network that makes it harder to intercept internet communications, or see where communications are coming from or going to.

In order to use the WikiLeaks public submission system as detailed above you can download the Tor Browser Bundle, which is a Firefox-like browser available for Windows, Mac OS X and GNU/Linux and pre-configured to connect using the anonymising system Tor.

Tails

If you are at high risk and you have the capacity to do so, you can also access the submission system through a secure operating system called Tails. Tails is an operating system launched from a USB stick or a DVD that aim to leaves no traces when the computer is shut down after use and automatically routes your internet traffic through Tor. Tails will require you to have either a USB stick or a DVD at least 4GB big and a laptop or desktop computer.

Tips

Our submission system works hard to preserve your anonymity, but we recommend you also take some of your own precautions. Please review these basic guidelines.

1. Contact us if you have specific problems

If you have a very large submission, or a submission with a complex format, or are a high-risk source, please contact us. In our experience it is always possible to find a custom solution for even the most seemingly difficult situations.

2. What computer to use

If the computer you are uploading from could subsequently be audited in an investigation, consider using a computer that is not easily tied to you. Technical users can also use Tails to help ensure you do not leave any records of your submission on the computer.

3. Do not talk about your submission to others

If you have any issues talk to WikiLeaks. We are the global experts in source protection – it is a complex field. Even those who mean well often do not have the experience or expertise to advise properly. This includes other media organisations.

After

1. Do not talk about your submission to others

If you have any issues talk to WikiLeaks. We are the global experts in source protection – it is a complex field. Even those who mean well often do not have the experience or expertise to advise properly. This includes other media organisations.

2. Act normal

If you are a high-risk source, avoid saying anything or doing anything after submitting which might promote suspicion. In particular, you should try to stick to your normal routine and behaviour.

3. Remove traces of your submission

If you are a high-risk source and the computer you prepared your submission on, or uploaded it from, could subsequently be audited in an investigation, we recommend that you format and dispose of the computer hard drive and any other storage media you used.

In particular, hard drives retain data after formatting which may be visible to a digital forensics team and flash media (USB sticks, memory cards and SSD drives) retain data even after a secure erasure. If you used flash media to store sensitive data, it is important to destroy the media.

If you do this and are a high-risk source you should make sure there are no traces of the clean-up, since such traces themselves may draw suspicion.

4. If you face legal action

If a legal action is brought against you as a result of your submission, there are organisations that may help you. The Courage Foundation is an international organisation dedicated to the protection of journalistic sources. You can find more details at https://www.couragefound.org.

Submit documents to WikiLeaks

WikiLeaks publishes documents of political or historical importance that are censored or otherwise suppressed. We specialise in strategic global publishing and large archives.

The following is the address of our secure site where you can anonymously upload your documents to WikiLeaks editors. You can only access this submissions system through Tor. (See our Tor tab for more information.) We also advise you to read our tips for sources before submitting.

wlupld3ptjvsgwqw.onion

Copy this address into your Tor browser. Advanced users, if they wish, can also add a further layer of encryption to their submission using our public PGP key.

If you cannot use Tor, or your submission is very large, or you have specific requirements, WikiLeaks provides several alternative methods. Contact us to discuss how to proceed.

MASERU 00000598 001.2 OF 005
1. SUMMARY: Millennium Challenge Corporation (MCC) Chief
Executive Officer (CEO) Paul Applegarth and other MCC officials
visited Lesotho October 25-26 on a familiarization trip. In an
extremely busy 36 hours, Mr. Applegarth and his team met with a
wide variety of government, private sector, NGO, and donor
representatives, as well as making three site visits, including
one for a project featured in the Compact proposal. Ambassador
Perry hosted private sector and NGO representatives as well as
the Ministers of Foreign Affairs, Finance, Tourism, Natural
Resources and Agriculture at the CMR for receptions and luncheon
discussions with the MCC team. In addition, Embassy Maseru
Pol/Econ and Public Diplomacy staff organized donor and public
affairs events for the MCC/CEO and delegation members at the
Chancery. The Government of Lesotho held a final reception in
honor of the CEO and his team. Prior to the visit, the
Ambassador, accompanied by DCM, briefed key GOL officials
(including the Prime Minister) on the familiarization rather
than technical nature of the trip. The Lesotho program
accomplished the team's goals and provided a reciprocal benefit
to government officials and others involved in Compact process,
who had a much-appreciated opportunity to meet senior MCC
leadership and learn more about the MCC's approach to evaluating
proposals. END SUMMARY.
2. On October 25-26, MCC/CEO Paul Applegarth visited Lesotho to
learn more about potential partners here in an MCC Compact and
to familiarize himself with the the overall economic and
political environment. Accompanying him were: John Hewko, MCC
Vice President, Country Relations; Maureen Harrington, Senior
Advisor; and Kristen Herring, Press Assistant. (Note: Lesotho
is one of the 16 countries declared eligible to compete for the
USD 1 billion in MCC funds allocated for FY 2004. The
government submitted a draft Compact in late September,
requesting a total of USD 254 million. The purpose of the trip
was not to provide detailed technical feedback on the
proposal.) The team met with a wide variety of persons and
organizations involved in drafting the Compact or with a strong
interest in the MCC's final decision. Activities included:
Meetings with:
Prime Minister Pakalitha Mosisili;
Minister of Foreign Affairs Kenneth Tsekoa;
Minister of Natural Resources (Mr.) Monyane Moleleki;
Working breakfast -- Home Affairs and Public Safety Tom Thabane;
Chief Executive of the Lesotho Highlands Development Authority,
(Mr.) E.L. Potloane;
(Combined) the Cabinet MCA Sub-Committee, the Principal
Secretaries' Steering Committee,
SIPDIS
and the technical working group;
Donor community representatives.
Other Events:
Ambassador hosted CMR working lunch with NGO representatives;
working lunch with Cabinet sub-committee, i.e., ministers of
foreign affairs, finance and development planning, agriculture
and food security, natural resources, and tourism, environment,
and culture; and a reception for private sector representatives;
Econ/Comm Assistant organized site visits to Lesotho Flour
Mills, (U.S. investment) and Global Textiles and Formosa
Textiles (AGOA-related investments) and a
visit to proposed site of the Metolong Dam, featured in
Lesotho's MCC proposal; and,
Public Diplomacy Officer hosted Press event for local media.
Ambassador Perry and DCM Albrecht accompanied the team on all
meetings/events. In addition, Public Diplomacy (PD) Officer
Dornburg, GSO Blosser, and Econ/Commercial Assistant Akhionbare
participated in most activities as did PD Assistant Nthejane.
--------------------------
Meeting with MFA
--------------------------
3. Mr. Applegarth's visit began with a call on MFA Tsekoa. The
CEO stressed, as he did in all subsequent conversations, that
the purpose of the visit was familiarization with those
individuals and groups involved in drafting the Compact, i.e.,
the potential partners with the MCC, should a final agreement be
reached. The team would not and could not provide detailed
feedback on the recently-submitted draft Compact. In response,
Tsekoa noted the wide-ranging participation in the drafting
SIPDIS
process both within and outside of the government which had
resulted in a strong sense of "ownership" of the proposal.
Priorities (development of water resources, agriculture,
industrialization, tourism, and institutional capacity building)
had been selected carefully. Another strong plus for Lesotho
was its continuing progress on democratization: free and fair
national elections in 2002, upcoming local elections (note:
planned for sometime before March 31, 2005, but no specific date
has been announced, end note) and the country's participation in
the AU African Peer Review Mechanism.
MASERU 00000598 002.2 OF 005
4. Describing the Compact as "thoughtful and comprehensive,"
Mr. Applegarth said he hoped to get a better understanding of
the proposal's implementation and its links to poverty reduction
and employment creation. He added that the MCC is preparing to
select eligible countries for 2005 and Lesotho is a candidate.
In response to a question from Tsekoa, he reassured the MFA that
eligibility in 2004 would not reduce a country's chances for
2005. Lesotho, in fact, does well under the two changed
eligibility criteria: reduction in the inflation rate ceiling
from 20 to 15 per cent and female, as opposed to overall,
primary school completion rate.
--------------------------------------
NGO's Provide Their Views
--------------------------------------
5. At the Ambassador's lunch with representatives of the NGO
community, CEO Applegarth solicited views about the consultation
process regarding the Compact and the proposal's priorities.
NGO's generally thought the consultations had been open and
genuine, with civil society's views receiving due consideration.
There was some disagreement on priorities. The proposed ski
resort, for example, did not match the Millennium Challenge
Account (MCA) Tourism Task Force's recommendation to develop
eco-tourism. A CARE employee and a local consultant questioned
how much the population would benefit from the three proposed
dam projects in the Compact. A representative from Habitat for
Humanity raised the long-standing problem of land tenure -- the
current system prevents owners from having clear title. The
Lesotho Council of NGO's noted that statistics in Lesotho are
often unreliable -- to which Applegarth commented that data
collection may need to be a part of the first state of any
implementation plan. He encouraged NGO's to remain engaged in
the consultations process, wich would continue as part of
efforts to develop an implementable Compact.
--------------------------------------------- --------------
-----------------------------
Cabinet Sub-Committee, PS Steering Committee and Others
--------------------------------------------- --------------
-----------------------------
6. At the Prime Minister's request, the GOL arranged a combined
meeting for the team with the Cabinet MCA Sub-Committee
(ministers of foreign affairs, finance and development,
agriculture and food security, and tourism, environment, and
culture), the Principal Secretary Steering Committee (members
from the same ministries as the Cabinet group), and
representatives of the technical working group, which included
NGO and private sector officials. Minister of Finance Thahane
noted that groups involved in creating the Vision 2020 national
plan and the Poverty Reduction Strategy Paper also worked on the
MCA document. The Minister made four major points:
1) The proposal's formulation was inclusive and would continue
to be so.
2) The private sector should be the engine of development,
requiring the government to create an attractive business
environment; government would engage the private sector on how
to create such an environment and what sectors are best for
development.
3) The government is addressing the need to improve
administrative and financial management. 4) Development in
Lesotho should be based on the resources available: people and
water.
7. Applegarth described MCA as part of the overall USG approach
to development, which consists of trade, debt relief, and
development aid. MCA is an investment of U.S. taxpayer money in
poverty reduction and economic growth, based on a partnership
model. By 2006, MCA would be the largest U.S. aid program since
the Marshall Plan, assuming full funding. Turning to Lesotho's
proposal, he described the document as "thoughtful," and based
on the resources available in the country. The consultative
process seemed to be appropriately inclusive.
8. Discussion then focused various aspects of the proposed
Compact. In response to questions about when a proposal might
be approved, Applegarth declined to be specific, but said he
would be disappointed if nothing was in place by the middle of
next year. To help move things along, he suggested that those
responsible for the Compact consider: phased-in implementation;
other funding sources, as MCA would assist other donors;
implementation by non-government entities; and what types of
policies require assistance that MCA could provide. Hewko
stressed the importance of measurable results, tangible outcomes
that do not involve merely materials or equipment.
-------------------------------------------
Minister of Natural Resources
-------------------------------------------
9. Minister Moleleki concentrated on describing the Metolong Dam
project featured in the Compact. Lesotho is requesting USD 43
MASERU 00000598 003.2 OF 005
million from MCC for the USD 115 million total project intended
to provide water for residential and industrial use in the
greater Maseru area. Metolong is a fast-track project;
according to the Minister; ground-breaking could occur in June
of July of 2005, if funding is available soon. (Note: an
environmental impact assessment, however, remains to be done.)
-----------------------------------
LHDA Director Potloane
-----------------------------------
10. The MCC team met with Potloane to see what lessons learned
from the Lesotho Highlands Water Project might apply to the
water projects proposed in the Compact. (Note: the LHWP
currently consists of two dams in central Lesotho which supply
water to South Africa, generating between USD 2 to 2.5 million
per month in revenue, at current rates, and generating all of
the electricity requirements for the national grid. Proposed
additional dams are underoing feasibility studies.) Potloane
felt that the management and engineering skills developed among
Basotho during the design and construction of LHWP would be used
on the lowlands projects in the Compact. While he praised the
overall proposal, Potloane stated several areas needed further
attention: a suitable organizational structure for water
distribution; improved water resource management legislation;
and careful selection of funding sources (South Africa covered
90 per cent of the cost of the LHWP).
---------------
Site Visits
---------------
11. The team visited Lesotho Flour Mills, 50 per cent owned by
U.S. company Seaboard Corporation and the only significant U.S.
investment in Lesotho, as well as Global Garments and Formosa
Textiles, two Taiwan-owned AGOA-based enterprises. At the flour
mill, Acting Managing Director Daniel Awani (who previously
managed some Seaboard operations in West Africa) described the
business environment in Lesotho, both in general and
sector-specific terms. Some of the problems he cited result
from Lesotho's situation as a landlocked country within a
country with a stronger economy. For example, the mill imports
90 per cent of its raw materials by rail through South Africa.
Although the company is situated within easy reach of the grain
producing area of South Africa, the rail system in South Africa
is not reticulated in a manner that allows the mill to take
advantage of proximity to surrounding farms. He said such
difficulties could be resolved through the rationalization of
transport routes by the Lesotho and South African governments.
Processing procedures at the South Africa - Lesotho border are
slow and should be streamlined.
12. Regarding labor, the mill is able to attract good quality
workers in Lesotho, but faces stiff competition from South
Africa, which offers much higher salaries. The laws governing
employment in Lesotho tend to be overprotective towards workers,
leading to protracted litigation which impacts on swift
disciplinary action by employers. Lesotho banks operate against
lending ceilings that are below the requirements of large
operators like the mill. The government bureaucracy governing
licenses, work permits etc. tends to be slow, but the mill has
not detected any corruption in its dealings with the
authorities. Similarly, the company felt that the court systems
operates in a transparent and fair manner.
13. Global Garments is one of three factories owned by Nien
Hsing, a Taiwan-based investor. It manufactures denim garments
for export to major United States retailers such as the GAP,
including Old Navy, and Walmart. Global has been operating for
the past eighteen months, and employs 2,500 workers. The company
currently imports fabric from the Far East, but will start using
cloth from Formosa Textiles, a sister fabric mill based in
Maseru. Nien Hsing operations in Lesotho employ a total of
9,000 workers including those at Formosa as well as another
production site. Factory management felt the government has
generally been helpful in meeting it needs, e.g.,
infrastructure, water supply, etc., although the electrical
supply is unstable at times. Formosa is operating at
significantly below capacity, due, its owners claim, to the
extension of the AGOA third country fabric provision which
allows clothing makers to continue importation of inexpensive
fabric from Asia.
14. The proposed site for the Metolong dam lies about 35
kilometers east of Maseru. Representatives of the Ministry of
Natural Resources and the Water and Sewage Authority who
accompanied the team stressed the minimal disruption of the
project to the surrounding area. No villages would need to be
relocated and the water level would not flood existing fields.
When filled, the dam would meet the anticipated needs of the
Maseru area and still have ample spare capacity.
--------------------------------------------- ---------------
Lunch with Cabinet MCA Sub-Committee
MASERU 00000598 004.2 OF 005
--------------------------------------------- ---------------
15. At a lunch hosted by the Ambassador, MFA Tsekoa
acknowledged the need to delineate priorities and phases in
Lesotho's proposal. CEO Applegarth commended Lesotho's culture
of openness and transparency described by various
persons/organizations the team had already met. He encouraged
consideration of an expanded resource model in Lesotho to
include highland water, Basotho people, the NGO community,
private sector, and donor organizations. Minister of Finance
Thahane expressed concern about the withdrawal of training by
cooperative partners in the U.S. over the past 10 years. He
underlined the ambiguity of the term "capacity building" and
called for integration of specific skills development into the
proposal. Despite admitted frustration at "talent poaching" by
South Africa, Ministers Phororo (Agriculture) and Mololeki
(Natural Resources) suggested resurrecting agro-economic,
management, and financial exchange opportunities such as the
former programs with Washington State University and the state
of Colorado. The ministers also illuminated for the MCC team
the nuanced displacement of highland for lowland Basotho values,
or a cattle-as-collateral to cattle-as-commodity shift amidst
increased stock theft and land use disputes. There remains some
sentiment for eventual development of tourist sites as noted by
Minister Nts'inyi who also commented on the recent international
tourism conference she attended in Washington, D.C. The
Government of Lesotho as a whole is eager for feedback on a
proposed Compact and for the next MCC team visit.
--------------------------------------------- ---------
Meeting with Donors and Press Event
--------------------------------------------- ---------
16. At the meeting with approximately 20 representatives of the
donor community, Applegarth outlined the basics of Lesotho's
proposed Compact. (Knowledge of the proposal among the donors
varied considerably.) He stressed that MCA is an addition to
the other donor initiatives. MCC would be happy to collaborate
with other donors in worthwhile projects planned or underway.
He added that the consultative process seemes to have been valid
and genuine. Donors commented that the consultations required
by MCA had significantly improved intra-governmental
communication and the GOL's outreach to other sectors. One of
the most experienced diplomatic representatives added that the
current environment is the best ever for getting a return on
one's investment in development. This event, held at the
Embassy, was followed by a press conference covered by national
television and print media including the country's leading news
magazine.
----------------------------------------
Meeting with Prime Minister
----------------------------------------
17. PM Mosisili praised the MCA as holding out great potential
for Lesotho. MCA is one of numerous USG initiatives (e.g.,
AGOA) that engage and involve the beneficiary country and, in
the process, gain the support of the general population.
Lesotho's progress in democratization has opened up society, he
added; the successful 2002 elections brought a peaceful
post-election period for the first time in the country's
history. This provides an opportunity to tackle development
issues. In that regard, the Compact's priority on building the
water sector is appropriate. The LHWP is a good example of how
the country can benefit from exploiting its water resources.
Mosisili agreed with Applegarth's suggestion about the need for
all parties involved in the Compact to consider implementation
options, refine indicators of success, and continue to work on
policy developmenmt. He volunteered that the time required to
start a business in Lesotho (an indicator where Lesotho ranks
below the median among MCA eligible countries) must be reduced.
Regardless of these issues, the Prime Minister concluded,
Lesotho would continue to provide its people and investors
honest government and respect for human rights. During the
GOL's Oct 26 reception, the finance Minister reiterated
Lesotho's gratitude for the visit and the opportunity to
exchange views with the team.
18. COMMENT: Although the team's actual time in Lesotho
amounted to little more than 36 hours, the visit accomplished
its objectives. The wide range of meeting and other activities
familiarized CEO Applegarth and his colleagues with the
potential partners in an MCC Compact and with the general
political and economic environment. From the perspective of
the partners, the familiarization was reciprocal. Meeting top
level MCC officials provided a greater understanding of the
organization's focus and direction, as well as the general
Compact evaluation process. The hosts would have appreciated
more feedback on the proposed Compact, which was not possible at
this time. Their eagerness for MCC's reaction and receptivity
to Applegarth's suggestions for work to be done in the interim
MASERU 00000598 005.2 OF 005
underscored the commitment of Lesotho to the MCA process. We
believe the GOL would work closely with any future MCA technical
teams to refine proposed projects and would insure continued
dialogue with the multiple constituencies engaged to date.
PERRY

Raw content

UNCLAS SECTION 01 OF 05 MASERU 000598
SIPDIS
E.O. 12958: N/A
TAGS: EAID, EINV, ECON, PREL, LT, MCC
SUBJECT: MCC CHIEF EXEC VISITS LESOTHO
MASERU 00000598 001.2 OF 005
1. SUMMARY: Millennium Challenge Corporation (MCC) Chief
Executive Officer (CEO) Paul Applegarth and other MCC officials
visited Lesotho October 25-26 on a familiarization trip. In an
extremely busy 36 hours, Mr. Applegarth and his team met with a
wide variety of government, private sector, NGO, and donor
representatives, as well as making three site visits, including
one for a project featured in the Compact proposal. Ambassador
Perry hosted private sector and NGO representatives as well as
the Ministers of Foreign Affairs, Finance, Tourism, Natural
Resources and Agriculture at the CMR for receptions and luncheon
discussions with the MCC team. In addition, Embassy Maseru
Pol/Econ and Public Diplomacy staff organized donor and public
affairs events for the MCC/CEO and delegation members at the
Chancery. The Government of Lesotho held a final reception in
honor of the CEO and his team. Prior to the visit, the
Ambassador, accompanied by DCM, briefed key GOL officials
(including the Prime Minister) on the familiarization rather
than technical nature of the trip. The Lesotho program
accomplished the team's goals and provided a reciprocal benefit
to government officials and others involved in Compact process,
who had a much-appreciated opportunity to meet senior MCC
leadership and learn more about the MCC's approach to evaluating
proposals. END SUMMARY.
2. On October 25-26, MCC/CEO Paul Applegarth visited Lesotho to
learn more about potential partners here in an MCC Compact and
to familiarize himself with the the overall economic and
political environment. Accompanying him were: John Hewko, MCC
Vice President, Country Relations; Maureen Harrington, Senior
Advisor; and Kristen Herring, Press Assistant. (Note: Lesotho
is one of the 16 countries declared eligible to compete for the
USD 1 billion in MCC funds allocated for FY 2004. The
government submitted a draft Compact in late September,
requesting a total of USD 254 million. The purpose of the trip
was not to provide detailed technical feedback on the
proposal.) The team met with a wide variety of persons and
organizations involved in drafting the Compact or with a strong
interest in the MCC's final decision. Activities included:
Meetings with:
Prime Minister Pakalitha Mosisili;
Minister of Foreign Affairs Kenneth Tsekoa;
Minister of Natural Resources (Mr.) Monyane Moleleki;
Working breakfast -- Home Affairs and Public Safety Tom Thabane;
Chief Executive of the Lesotho Highlands Development Authority,
(Mr.) E.L. Potloane;
(Combined) the Cabinet MCA Sub-Committee, the Principal
Secretaries' Steering Committee,
SIPDIS
and the technical working group;
Donor community representatives.
Other Events:
Ambassador hosted CMR working lunch with NGO representatives;
working lunch with Cabinet sub-committee, i.e., ministers of
foreign affairs, finance and development planning, agriculture
and food security, natural resources, and tourism, environment,
and culture; and a reception for private sector representatives;
Econ/Comm Assistant organized site visits to Lesotho Flour
Mills, (U.S. investment) and Global Textiles and Formosa
Textiles (AGOA-related investments) and a
visit to proposed site of the Metolong Dam, featured in
Lesotho's MCC proposal; and,
Public Diplomacy Officer hosted Press event for local media.
Ambassador Perry and DCM Albrecht accompanied the team on all
meetings/events. In addition, Public Diplomacy (PD) Officer
Dornburg, GSO Blosser, and Econ/Commercial Assistant Akhionbare
participated in most activities as did PD Assistant Nthejane.
--------------------------
Meeting with MFA
--------------------------
3. Mr. Applegarth's visit began with a call on MFA Tsekoa. The
CEO stressed, as he did in all subsequent conversations, that
the purpose of the visit was familiarization with those
individuals and groups involved in drafting the Compact, i.e.,
the potential partners with the MCC, should a final agreement be
reached. The team would not and could not provide detailed
feedback on the recently-submitted draft Compact. In response,
Tsekoa noted the wide-ranging participation in the drafting
SIPDIS
process both within and outside of the government which had
resulted in a strong sense of "ownership" of the proposal.
Priorities (development of water resources, agriculture,
industrialization, tourism, and institutional capacity building)
had been selected carefully. Another strong plus for Lesotho
was its continuing progress on democratization: free and fair
national elections in 2002, upcoming local elections (note:
planned for sometime before March 31, 2005, but no specific date
has been announced, end note) and the country's participation in
the AU African Peer Review Mechanism.
MASERU 00000598 002.2 OF 005
4. Describing the Compact as "thoughtful and comprehensive,"
Mr. Applegarth said he hoped to get a better understanding of
the proposal's implementation and its links to poverty reduction
and employment creation. He added that the MCC is preparing to
select eligible countries for 2005 and Lesotho is a candidate.
In response to a question from Tsekoa, he reassured the MFA that
eligibility in 2004 would not reduce a country's chances for
2005. Lesotho, in fact, does well under the two changed
eligibility criteria: reduction in the inflation rate ceiling
from 20 to 15 per cent and female, as opposed to overall,
primary school completion rate.
--------------------------------------
NGO's Provide Their Views
--------------------------------------
5. At the Ambassador's lunch with representatives of the NGO
community, CEO Applegarth solicited views about the consultation
process regarding the Compact and the proposal's priorities.
NGO's generally thought the consultations had been open and
genuine, with civil society's views receiving due consideration.
There was some disagreement on priorities. The proposed ski
resort, for example, did not match the Millennium Challenge
Account (MCA) Tourism Task Force's recommendation to develop
eco-tourism. A CARE employee and a local consultant questioned
how much the population would benefit from the three proposed
dam projects in the Compact. A representative from Habitat for
Humanity raised the long-standing problem of land tenure -- the
current system prevents owners from having clear title. The
Lesotho Council of NGO's noted that statistics in Lesotho are
often unreliable -- to which Applegarth commented that data
collection may need to be a part of the first state of any
implementation plan. He encouraged NGO's to remain engaged in
the consultations process, wich would continue as part of
efforts to develop an implementable Compact.
--------------------------------------------- --------------
-----------------------------
Cabinet Sub-Committee, PS Steering Committee and Others
--------------------------------------------- --------------
-----------------------------
6. At the Prime Minister's request, the GOL arranged a combined
meeting for the team with the Cabinet MCA Sub-Committee
(ministers of foreign affairs, finance and development,
agriculture and food security, and tourism, environment, and
culture), the Principal Secretary Steering Committee (members
from the same ministries as the Cabinet group), and
representatives of the technical working group, which included
NGO and private sector officials. Minister of Finance Thahane
noted that groups involved in creating the Vision 2020 national
plan and the Poverty Reduction Strategy Paper also worked on the
MCA document. The Minister made four major points:
1) The proposal's formulation was inclusive and would continue
to be so.
2) The private sector should be the engine of development,
requiring the government to create an attractive business
environment; government would engage the private sector on how
to create such an environment and what sectors are best for
development.
3) The government is addressing the need to improve
administrative and financial management. 4) Development in
Lesotho should be based on the resources available: people and
water.
7. Applegarth described MCA as part of the overall USG approach
to development, which consists of trade, debt relief, and
development aid. MCA is an investment of U.S. taxpayer money in
poverty reduction and economic growth, based on a partnership
model. By 2006, MCA would be the largest U.S. aid program since
the Marshall Plan, assuming full funding. Turning to Lesotho's
proposal, he described the document as "thoughtful," and based
on the resources available in the country. The consultative
process seemed to be appropriately inclusive.
8. Discussion then focused various aspects of the proposed
Compact. In response to questions about when a proposal might
be approved, Applegarth declined to be specific, but said he
would be disappointed if nothing was in place by the middle of
next year. To help move things along, he suggested that those
responsible for the Compact consider: phased-in implementation;
other funding sources, as MCA would assist other donors;
implementation by non-government entities; and what types of
policies require assistance that MCA could provide. Hewko
stressed the importance of measurable results, tangible outcomes
that do not involve merely materials or equipment.
-------------------------------------------
Minister of Natural Resources
-------------------------------------------
9. Minister Moleleki concentrated on describing the Metolong Dam
project featured in the Compact. Lesotho is requesting USD 43
MASERU 00000598 003.2 OF 005
million from MCC for the USD 115 million total project intended
to provide water for residential and industrial use in the
greater Maseru area. Metolong is a fast-track project;
according to the Minister; ground-breaking could occur in June
of July of 2005, if funding is available soon. (Note: an
environmental impact assessment, however, remains to be done.)
-----------------------------------
LHDA Director Potloane
-----------------------------------
10. The MCC team met with Potloane to see what lessons learned
from the Lesotho Highlands Water Project might apply to the
water projects proposed in the Compact. (Note: the LHWP
currently consists of two dams in central Lesotho which supply
water to South Africa, generating between USD 2 to 2.5 million
per month in revenue, at current rates, and generating all of
the electricity requirements for the national grid. Proposed
additional dams are underoing feasibility studies.) Potloane
felt that the management and engineering skills developed among
Basotho during the design and construction of LHWP would be used
on the lowlands projects in the Compact. While he praised the
overall proposal, Potloane stated several areas needed further
attention: a suitable organizational structure for water
distribution; improved water resource management legislation;
and careful selection of funding sources (South Africa covered
90 per cent of the cost of the LHWP).
---------------
Site Visits
---------------
11. The team visited Lesotho Flour Mills, 50 per cent owned by
U.S. company Seaboard Corporation and the only significant U.S.
investment in Lesotho, as well as Global Garments and Formosa
Textiles, two Taiwan-owned AGOA-based enterprises. At the flour
mill, Acting Managing Director Daniel Awani (who previously
managed some Seaboard operations in West Africa) described the
business environment in Lesotho, both in general and
sector-specific terms. Some of the problems he cited result
from Lesotho's situation as a landlocked country within a
country with a stronger economy. For example, the mill imports
90 per cent of its raw materials by rail through South Africa.
Although the company is situated within easy reach of the grain
producing area of South Africa, the rail system in South Africa
is not reticulated in a manner that allows the mill to take
advantage of proximity to surrounding farms. He said such
difficulties could be resolved through the rationalization of
transport routes by the Lesotho and South African governments.
Processing procedures at the South Africa - Lesotho border are
slow and should be streamlined.
12. Regarding labor, the mill is able to attract good quality
workers in Lesotho, but faces stiff competition from South
Africa, which offers much higher salaries. The laws governing
employment in Lesotho tend to be overprotective towards workers,
leading to protracted litigation which impacts on swift
disciplinary action by employers. Lesotho banks operate against
lending ceilings that are below the requirements of large
operators like the mill. The government bureaucracy governing
licenses, work permits etc. tends to be slow, but the mill has
not detected any corruption in its dealings with the
authorities. Similarly, the company felt that the court systems
operates in a transparent and fair manner.
13. Global Garments is one of three factories owned by Nien
Hsing, a Taiwan-based investor. It manufactures denim garments
for export to major United States retailers such as the GAP,
including Old Navy, and Walmart. Global has been operating for
the past eighteen months, and employs 2,500 workers. The company
currently imports fabric from the Far East, but will start using
cloth from Formosa Textiles, a sister fabric mill based in
Maseru. Nien Hsing operations in Lesotho employ a total of
9,000 workers including those at Formosa as well as another
production site. Factory management felt the government has
generally been helpful in meeting it needs, e.g.,
infrastructure, water supply, etc., although the electrical
supply is unstable at times. Formosa is operating at
significantly below capacity, due, its owners claim, to the
extension of the AGOA third country fabric provision which
allows clothing makers to continue importation of inexpensive
fabric from Asia.
14. The proposed site for the Metolong dam lies about 35
kilometers east of Maseru. Representatives of the Ministry of
Natural Resources and the Water and Sewage Authority who
accompanied the team stressed the minimal disruption of the
project to the surrounding area. No villages would need to be
relocated and the water level would not flood existing fields.
When filled, the dam would meet the anticipated needs of the
Maseru area and still have ample spare capacity.
--------------------------------------------- ---------------
Lunch with Cabinet MCA Sub-Committee
MASERU 00000598 004.2 OF 005
--------------------------------------------- ---------------
15. At a lunch hosted by the Ambassador, MFA Tsekoa
acknowledged the need to delineate priorities and phases in
Lesotho's proposal. CEO Applegarth commended Lesotho's culture
of openness and transparency described by various
persons/organizations the team had already met. He encouraged
consideration of an expanded resource model in Lesotho to
include highland water, Basotho people, the NGO community,
private sector, and donor organizations. Minister of Finance
Thahane expressed concern about the withdrawal of training by
cooperative partners in the U.S. over the past 10 years. He
underlined the ambiguity of the term "capacity building" and
called for integration of specific skills development into the
proposal. Despite admitted frustration at "talent poaching" by
South Africa, Ministers Phororo (Agriculture) and Mololeki
(Natural Resources) suggested resurrecting agro-economic,
management, and financial exchange opportunities such as the
former programs with Washington State University and the state
of Colorado. The ministers also illuminated for the MCC team
the nuanced displacement of highland for lowland Basotho values,
or a cattle-as-collateral to cattle-as-commodity shift amidst
increased stock theft and land use disputes. There remains some
sentiment for eventual development of tourist sites as noted by
Minister Nts'inyi who also commented on the recent international
tourism conference she attended in Washington, D.C. The
Government of Lesotho as a whole is eager for feedback on a
proposed Compact and for the next MCC team visit.
--------------------------------------------- ---------
Meeting with Donors and Press Event
--------------------------------------------- ---------
16. At the meeting with approximately 20 representatives of the
donor community, Applegarth outlined the basics of Lesotho's
proposed Compact. (Knowledge of the proposal among the donors
varied considerably.) He stressed that MCA is an addition to
the other donor initiatives. MCC would be happy to collaborate
with other donors in worthwhile projects planned or underway.
He added that the consultative process seemes to have been valid
and genuine. Donors commented that the consultations required
by MCA had significantly improved intra-governmental
communication and the GOL's outreach to other sectors. One of
the most experienced diplomatic representatives added that the
current environment is the best ever for getting a return on
one's investment in development. This event, held at the
Embassy, was followed by a press conference covered by national
television and print media including the country's leading news
magazine.
----------------------------------------
Meeting with Prime Minister
----------------------------------------
17. PM Mosisili praised the MCA as holding out great potential
for Lesotho. MCA is one of numerous USG initiatives (e.g.,
AGOA) that engage and involve the beneficiary country and, in
the process, gain the support of the general population.
Lesotho's progress in democratization has opened up society, he
added; the successful 2002 elections brought a peaceful
post-election period for the first time in the country's
history. This provides an opportunity to tackle development
issues. In that regard, the Compact's priority on building the
water sector is appropriate. The LHWP is a good example of how
the country can benefit from exploiting its water resources.
Mosisili agreed with Applegarth's suggestion about the need for
all parties involved in the Compact to consider implementation
options, refine indicators of success, and continue to work on
policy developmenmt. He volunteered that the time required to
start a business in Lesotho (an indicator where Lesotho ranks
below the median among MCA eligible countries) must be reduced.
Regardless of these issues, the Prime Minister concluded,
Lesotho would continue to provide its people and investors
honest government and respect for human rights. During the
GOL's Oct 26 reception, the finance Minister reiterated
Lesotho's gratitude for the visit and the opportunity to
exchange views with the team.
18. COMMENT: Although the team's actual time in Lesotho
amounted to little more than 36 hours, the visit accomplished
its objectives. The wide range of meeting and other activities
familiarized CEO Applegarth and his colleagues with the
potential partners in an MCC Compact and with the general
political and economic environment. From the perspective of
the partners, the familiarization was reciprocal. Meeting top
level MCC officials provided a greater understanding of the
organization's focus and direction, as well as the general
Compact evaluation process. The hosts would have appreciated
more feedback on the proposed Compact, which was not possible at
this time. Their eagerness for MCC's reaction and receptivity
to Applegarth's suggestions for work to be done in the interim
MASERU 00000598 005.2 OF 005
underscored the commitment of Lesotho to the MCA process. We
believe the GOL would work closely with any future MCA technical
teams to refine proposed projects and would insure continued
dialogue with the multiple constituencies engaged to date.
PERRY

Metadata

This record is a partial extract of the original cable. The full text of the original cable is not available.

Print

You can use this tool to generate a print-friendly PDF of the document 04MASERU598_a.

Include summaryInclude headersInclude raw metadata

Share

The formal reference of this document is 04MASERU598_a, please use it for anything written about this document. This will permit you and others to search for it.

Direct link to documentReddit codeHTML codeForum code (bbcode)

Submit this story

Help Expand The Public Library of US Diplomacy

Your role is important:
WikiLeaks maintains its robust independence through your contributions.